With a record Q2 earnings in the book showing $1.31 Billion in sales—up 4% YOY—Logitech (LOGI) continues to soar, but its long-term growth prospects are even brighter as it expands further into booming sectors like gaming and as it reaps the benefits of the new work from home world.
And much of that bright future can be attributed to the fact that while Logitech is growing like a grown up, it can’t stop acting like a startup.
That is by design for CEO Bracken Darrell who truly embodies the entrepreneurial spirit—even to the extent that he regularly “fires” and “rehires” himself, as he recently told me and Investors Business Daily, just to force a regular fresh look at everything he is doing.
“It’s a great feeling,” he says. “it’s such a light feeling. It’s a level of independence. You’re the new guy. The old guy was a bozo. You have no constraints.”
At Northwestern University’s Kellogg School of Management, I teach Dancing with Startups in the MBA and Exec. Ed. Programs, helping leaders of the world’s largest companies, drive growth through entrepreneurial-innovation and co-creation partnerships at startup speeds.
While many corporations are still trying-out “Dancing,” as they attempt to transform their competitiveness, Logitech has embraced it. One big difference is Bracken balances the three critical components that I like to focus on when rebooting organizations—People, Platform and Passion—to create a culture of trust and permission to grow.
Dancing is not for the faint of heart, it can be messy and you can’t fake it. It requires large organizations to let go of their big, fat and slow behaviors, cultures and bureaucracies. But despite a whopping 23 people directly reporting to him, compared to 7 that most Fortune 500 CEOs have on average, Bracken and his distributed teams are getting the job done globally.
The Four “E”s
There are many entrepreneurial dancing styles that Fortune 500’s are deploying to improve growth and act more like startups. The most impactful organizations that I’ve worked with focus on the Four “E”s: Enable the core; Embed the Entrepreneurs; Escape the Mothership and Engage the Ecosystem. Many companies have tried and failed to adopt such radical approaches—but not Logitech. The people of Logitech embody the Four “E”s, with a global network of partners and resources that are co-creating the next-generation of products, services and ventures.
Enable the Core
Bracken says of all the Four “E”s, enabling entrepreneurship among the core might be the hardest thing to do. The idea here is to empower current employees to think and act like entrepreneurs, but that can be challenging. Logitech, however, has this organically in their DNA. The company is focused on enabling its people to pursue their passion, but that takes a lot of work. Bracken says, “we created a culture that enables people to think in an innovative way about what needs to be done. They have a lot of independence—and not just senior management, but the whole company.”
He says an example of this is their mouse and keyboard business—a relatively mature category but now where some of the most exciting innovations in the company are coming from. The teams that Bracken has empowered are taking a fresh look at who Logitech is targeting in this area and inventing new products for them.
“We are enabling the core and getting more from it,” he says. Logitech traditionally did not have much of a focus on ergonomics, for example, and now the company has a great focus on them, enabling them to compete around the edges.
Embed the Entrepreneurs
To make sure these programs really adopt a startup mentality, Bracken literally embeds entrepreneurs in them. “We bring entrepreneurs in to run seed programs,” he said. “The guy who runs our second biggest business is an entrepreneur.” And Bracken says the move confounded recruiters. “They kept looking for someone who ran big companies. We hired someone who five years ago took a $40 million business to a billion. That’s the type of people we want.”
Escape the Mothership
In the case of Logitech, with some 9,000 employees and revenue just shy of $3 Billion, the mothership is huge, but Bracken has found a novel way to escape it—with “seeds.” The groups are called neither incubator nor accelerators, (how refreshing) but are individual teams, separated from the organization, that have independence and their own budgets. Unlike startups, they get three to four months of funding to see what they can do—not years. As Bracken says, “no one needs funding for two years to prove an idea.” The “seeds” report on progress every few weeks where—in a lesson learned from Pixar—they just come in and pitch “stuff.”
Engage the Ecosystem
The last component that many companies attempt to achieve, engaging with the global ecosystem, is something that Bracken takes to heart. “I have personally engaged with literally thousands of startups since I started,” he says. “I have a better sense now than ever as to what is happening on the edges of our business. That is where the opportunities are—on the edges. Sometimes I meet two to three times a day with startups. They are so important to informing what we are doing.”
The startup ethos has placed Logitech in an optimal position for growth by being able to not only identify opportunities, but move quickly on the booming trends in education, workspaces, video, streaming, creating and games.
“The future for us will be focused more and more around services built upon our hardware,” says Bracken. “For example, video collaboration, especially as relates to the creator economy, represents a huge opportunity for us, as does gaming, which will represent a greater revenue source than traditional sports engagement in the very near future.”
Gaming, in particular, seems to be showing limitless growth. Logitech made early bets on the category that continue to pay off today. They continue to partner and announce deals with platforms, like the League of Legends World Championship, which amazingly, is on a par with the Super Bowl in terms of audience.
With a culture that embraces the Four “E”s, Logitech may continue to grow like a grown-up, but it will keep at its core the soul of a startup as a way to fuel the next-gen of growth and innovation.
Read More: Why Logitech Can’t Stop Acting Like A Startup